Friendly Hills Bank Reports Third Quarter Results; Announces Results of Recent Shareholder Meeting

WHITTIER, Calif., Nov. 01, 2017 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “bank”) (OTCBB:FHLB) reported results for the third quarter of 2017.

For the nine month period ending September 30, 2017, the bank reported net income of $525,000 or $0.27 per diluted share of common stock. The bank reported net income of $328,000 or $0.17 per diluted share of common stock for the nine months ended September 30, 2016. This figure includes a $36,000 net gain on securities sold.

As of September 30, 2017, the bank reported total assets of $152.8 million, a 7% increase from $142.6 million as of September 30, 2016. The bank’s loan portfolio, net of unearned income, increased 4% from $79.0 million as of September 30, 2016, to $82.2 million as of September 30, 2017. The portfolio remains diversified with $31.2 million or 38% in Commercial & Industrial Loans to local businesses (including $19.2 million in Owner Occupied Commercial Real Estate Loans), $20.3 million or 25% in Residential Real Estate Loans to investors and $22.0 million or 27% in Commercial Real Estate Loans to investors. The bank has an additional $23.9 million in unfunded loan commitments.

The bank’s overall deposit base has increased 8% in the twelve months ended September 30, 2017, from $115.1 million as of September 30, 2016, to $123.8 million as of September 30, 2017. Non-interest bearing deposits continue to form a substantial part of the deposit base (41%), increasing from $48.1 million to $50.4 million as of September 30, 2017. During the same time period interest-bearing deposits increased from $67.0 million to $73.4 million on September 30, 2017. The bank has no deposits which were sourced through brokers or other wholesale funding sources.

At September 30, 2017, shareholders’ equity was $16.5 million and the bank’s total risk-based capital ratio was 17%, significantly exceeding the “well-capitalized” level of 10% prescribed under regulatory requirements. The bank also continues to maintain substantial liquidity positions, retaining significant balances of liquidity as well as available collateralized borrowings and other potential sources of liquidity.

At a meeting held on September 19, 2017, a majority of shareholders approved the adoption of the 2017 Equity Incentive Plan and the formation of a Bank Holding Company.

“We are very pleased to report another solid quarter of financial performance for the company,” commented Jeffrey K. Ball, Chief Executive Officer. “During the most recent quarter we saw the cyclicality of our deposit base swing back with strong growth particularly in Noninterest-bearing deposits. As economic activity continues to improve in our region we are seeing increased pressure on loan terms in the markets that we serve. But we will continue to maintain our high standards of loan underwriting and management to preserve the long-term strength of our balance sheet. We appreciate the support of our shareholders in approving the new equity incentive plan and bank holding company which will each provide greater flexibility for the company in our continued pursuit of long-term shareholder value.”

Company Profile:
Friendly Hills Bank is a community bank which was formed to primarily serve the Southern California communities of eastern Los Angeles County and northern Orange County. The bank was established in 2006 by prominent members of the local community who were seeking an alternative to the larger financial institutions in the area. The bank is headquartered in Whittier, California with an additional branch office in Santa Fe Springs, California. For more information on the bank, please visit or call 562-947-1920.

Forward Looking Statements:
The numbers in this press release are unaudited. Statements such as those regarding the anticipated development and expansion of Friendly Hills Bank's business, and the intent, belief or current expectations of the bank, its directors or its officers, are "forward looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, risks related to the local and national economy, the bank's performance, including its ability to generate loan and deposit growth, changes in interest rates, and regulatory matters.

Friendly Hills Bank
Balance Sheets (Unaudited)
(in thousands, except per share information)
9/30/17 12/31/16 9/30/16
Cash and due from banks$ 3,942 $ 4,747 $ 4,026
Interest bearing deposits with other financial institutions 9,403 14,818 22,993
Cash and Cash Equivalents 13,345 19,565 27,019
Investment securities available-for-sale 51,122 42,183 30,624
Federal Home Loan Bank stock 835 779 779
Federal Reserve Bank stock 476 474 457
Loans, net of unearned income 82,181 74,986 79,019
Allowance for loan losses (1,525) (1,525) (1,525)
Net Loans 80,656 73,461 77,494
Premises and equipment, net 346 244 229
Accrued interest receivable and other assets 5,971 6,156 6,017
Total Assets$ 152,751 $ 142,862 $ 142,619
Noninterest-bearing deposits$ 50,374 $ 47,517 $ 48,055
Interest-bearing deposits 73,427 68,012 67,047
Total Deposits 123,801 115,529 115,102
FHLB advances 11,000 11,000 11,000
Accrued interest payable and other liabilities 1,458 467 657
Total Liabilities 136,259 126,996 126,759
Shareholders’ Equity
Common stock, no par value, 10,000,000 shares authorized:
1,939,193 shares issued and outstanding 15,958 15,958 15,958
Additional paid-in-capital 1,091 1,091 1,091
Accumulated deficit (421) (946) (1,323)
Accumulated other comprehensive income (loss) (136) (237) 134
Total Shareholders’ Equity 16,492 15,866 15,860
Total Liabilities and Shareholders’ Equity$ 152,751 $ 142,862 $ 142,619
Book Per Share$ 8.50 $ 8.18 $ 8.18

Friendly Hills Bank
Statements of Operations (Unaudited)
(in thousands, except per share information)
For the nine For the nine
months ended months ended
9/30/17 9/30/16
Interest Income$ 3,768 $ 3,360
Interest Expense (256) (234)
Net Interest Income 3,512 3,126
Provision for Loan Losses 0 0
Net Interest Income after Provision for Loan Losses 3,512 3,126
Noninterest Income 413 335
Noninterest Expense (3,068) (2,976)
Non-Recurring Items 0 36
Income before Provision for Income Taxes 857 521
(Provision) Benefit for Income Taxes (332) (193)
Net Income$ 525 $328
Basic and Diluted Earnings Per Share$ 0.27 $ 0.17

Jeffrey K. Ball (President & CEO)
Daniel L. Erickson (EVP & CFO)
(562) 947-1920

Source:Friendly Hills Bank